Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow improved versus the prior quarter but weakened compared to the same quarter last year. The cash conversion margin strengthened sequentially, driven by higher operating cash flow relative to revenue.
- Revenue declined from both the prior quarter and the year-ago quarter, yet operating cash flow increased sequentially, leading to a higher free cash flow margin. Capital expenditure was lower in both comparisons, supporting free cash flow.
- Compared to the immediately preceding quarter, free cash flow and its margin were higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were lower, as operating cash flow declined more than the reduction in capital expenditure.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.7B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$81.0M
Capital spending and related asset purchases.
FCF margin
15.2%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2024-05-31 | $12.6B | $2.6B | $213.0M | $2.4B | 19.1% |
| 2024-08-31 | $11.6B | $394.0M | $120.0M | $274.0M | 2.4% |
| 2024-11-30 | $12.4B | $1.0B | $129.0M | $920.0M | 7.4% |
| 2025-02-28 | $11.3B | $1.8B | $81.0M | $1.7B | 15.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 215.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 0.7% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$355.0M | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Recovery
Operating cash flow increased substantially from the prior quarter, more than offsetting the revenue decline and supporting a higher free cash flow margin.
This was the strongest observable driver of the quarter's free cash flow improvement.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue declined from both the prior quarter and the year-ago quarter, yet operating cash flow increased sequentially, leading to a higher free cash flow margin. Capital expenditure was lower in both comparisons, supporting free cash flow.
Compared to the immediately preceding quarter, free cash flow and its margin were higher, driven by stronger operating cash flow and lower capital expenditure. Versus the same quarter one year earlier, free cash flow and margin were lower, as operating cash flow declined more than the reduction in capital expenditure.
Monitor the trend in operating cash flow, as it declined year-over-year despite a sequential improvement.